The future continues to look grim for Rhode Island game developer 38 Studios. After missing a May 1 loan payment and failing to make payroll last week, the beleaguered studio has had to lay off some employees.

Rhode Island governor Lincoln Chafee confirmed to local network WPRI yesterday that 38 Studios would be letting an as-yet unknown number of employees go, in an attempt to manage their financial resources. The state agreed in 2010 to lend the studio up to $75 million under the promise of creating an eventual 450 jobs to the area. Having to lay off staff clearly defeats that purpose.

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Though the governor was initially against the loan to 38 Studios, he has stated repeatedly that it is in the best interest of the state to keep the studio solvent if possible—but without continuing to pour money into the business. Chafee stressed that the developer needs to find private capital as soon as possible, both for its own sake and for the taxpayers of Rhode Island.